Salida School Dist. R-32-J v. Morrison

Citation732 P.2d 1160
Decision Date17 February 1987
Docket NumberR-32-,P,No. 85SC64,85SC64
Parties37 Ed. Law Rep. 1270, 1 IER Cases 1661 SALIDA SCHOOL DISTRICTetitioner, v. Karen L. MORRISON, Respondent.
CourtSupreme Court of Colorado

Law Offices of Reese Miller, P.C., Kenneth A. DeLay, Reese Miller, Denver, Rush & Rush, Robert P. Rush, Salida, for petitioner.

Hobbs/Bethke & Associates, Larry F. Hobbs, P.C., William P. Bethke, Vonda G. Hall, Denver, for respondent.

ERICKSON, Justice.

We granted certiorari to review the court of appeals decision in Morrison v. Salida School District R-32-J, 701 P.2d 101 (Colo.App.1984), which held that findings of fact entered in an unemployment compensation hearing estopped the claimant's employer from relitigating issues determined at the hearing in a subsequent suit for damages or equitable relief pursuant to 42 U.S.C. § 1983 (1982). We reverse and remand with directions.

I.

The plaintiff, Karen Morrison, was a non-tenured high school English teacher employed by the defendant, Salida School District R-32-J (School District). On April 8, 1980, the School District voted not to renew Morrison's teaching contract for the 1980-81 school year.

In the summer of 1980, Morrison filed a claim for unemployment compensation under the Colorado Employment Security Act, sections 8-70-101 to 8-82-105 (1986). A deputy of the Division of Employment and Training (Division) found that Morrison's contract was not renewed due to lack of work, and awarded full benefits to her. An appeals referee of the Division affirmed the decision, and entered the following findings of fact:

The principal recommended non-renewal of the claimant's contract for the 1980-1981 school year. He had received comments from the teachers in the school that the claimant was too outspoken for a new staff member. The principal had mentioned this to the claimant once during the first year of her employment, but at no other time. She was never given indication that her outspokenness might jeopardize her job. He had also been told that the claimant had expressed negative opinions as to the teaching guideline[s] set out by the local school district. However, there was no indication that she refused to follow the guidelines and he was satisfied with her teaching when he observed her in the classroom.

The referee finds that the claimant was discharged from her position because of her outspokenness. She was not given any indication that she was in danger of losing her job for this or any other reason. It is concluded, therefore, that this separation was the responsibility of the employer.

(Emphasis added.) The School District did not appeal the referee's decision.

On March 15, 1982, Morrison brought suit against the School District pursuant to 42 U.S.C. § 1983 (1982), alleging that the School District's decision not to renew her teaching contract violated her rights under the first and fourteenth amendments to the United States Constitution. She also claimed that the School District's decision violated Article II, sections 10 and 29, of the Colorado Constitution. Morrison sought compensatory and punitive damages, expunction of the record of the non-renewal of her contract, and an equitable order of reinstatement. In its answer, the School District denied that its failure to renew Morrison's teaching contract deprived her of any constitutional right. As an affirmative defense, the School District alleged that it would have reached the same decision in the absence of protected conduct.

On January 27, 1983, Morrison moved for summary judgment as to the School District's liability. She claimed that the referee's finding in the unemployment compensation proceeding that she was dismissed for her "outspokenness" was binding on the School District under the doctrine of collateral estoppel, and that she was entitled to judgment as a matter of law. The district court agreed, and entered judgment as to liability against the School District. In subsequent proceedings, the district court ordered Morrison's reinstatement for a period of not less than two years, and directed the School District to expunge the record of Morrison's non-renewal and to remit back pay in excess of $25,000. The district court also awarded attorneys' fees and costs to Morrison in the amount of $5,688.89. 1

The School District appealed, and the court of appeals affirmed. The court of appeals held that the referee's findings of fact were binding on the parties in the subsequent section 1983 action, and that Morrison's termination for her "outspokenness" established a prima facie case of retaliatory discharge in violation of the first amendment to the United States Constitution. Because the School District failed to rebut Morrison's prima facie case by means other than argument of counsel in its response to her motion for summary judgment, the court of appeals concluded that the School District failed to establish a genuine issue of material fact.

II.

The doctrines of collateral estoppel and res judicata "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980). Collateral estoppel bars relitigation of an issue determined at a prior proceeding if (1) the issue precluded is identical to an issue actually litigated and necessarily adjudicated at the prior proceeding; (2) the party against whom estoppel is sought was a party to or was in privity with a party to the prior proceeding; (3) there was a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. Industrial Commission v. Moffat County School District Re No. 1, 732 P.2d 616 (Colo.1987); People v. Hearty, 644 P.2d 302, 312 (Colo.1982); Pomeroy v. Waitkus, 183 Colo. 344, 350-51, 517 P.2d 396, 399 (1974). If the doctrine applies, the final decision of an adjudicative body on an issue actually litigated is conclusive of that issue in a subsequent action. Pomeroy, 183 Colo. at 350, 517 P.2d at 399. The doctrine may be applied to the decisions of administrative bodies as well as to the judgments of courts. Industrial Commission v. Moffat County School District Re No. 1, at 620; Umberfield v. School District No. 11, 185 Colo. 165, 173-74, 522 P.2d 730, 734 (1974). 2

In Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980), the Supreme Court held that federal courts must apply traditional concepts of collateral estoppel in a section 1983 action. 3 Id. at 103-04, 101 S.Ct. at 419-20. In later cases, the Supreme Court has reaffirmed and expanded the rule announced in Allen. See Migra v. Warren City School District Board of Education, 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984) (a final state court judgment bars review in a section 1983 action of issues that could have been raised in the state court suit); Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982) (a federal court must give preclusive effect to a state court decision upholding an administrative agency's rejection of the plaintiff's employment discrimination claim). A federal court deciding a section 1983 claim must give the same preclusive effect to an unappealed decision of a state administrative body as that decision would be given in the courts of the state in which the decision was rendered. University of Tennessee v. Elliott, 478 U.S. 788, 106 S.Ct. 3220, 92 L.Ed.2d 635 (1986). See also Migra, 465 U.S. at 81, 104 S.Ct. at 896; Kremer, 456 U.S. at 481-82, 102 S.Ct. at 1897-98.

We therefore must determine the preclusive effect that must be given by our state courts to issues resolved in an unemployment compensation proceeding. Because of the differences between the two proceedings involved in this case, we conclude that collateral estoppel does not apply. 4 The remedies available and procedures followed in a section 1983 action are materially different from the remedies and procedures available in an unemployment compensation proceeding, the issues presented are not identical, and the employer has little incentive to defend a claim for unemployment benefits vigorously.

III.

The Colorado Employment Security Act (CESA), section 8-70-101 to 8-82-105 (1986), is designed to lighten the burden of unemployment, "which ... falls with crushing force upon the unemployed worker and his family." § 8-70-102, 3B C.R.S. (1986). CESA establishes a mechanism by which funds are accumulated to provide compensation for a limited time to those who are involuntarily unemployed through no fault of their own. § 8-73-108(1)(a), 3B C.R.S. (1986); Harding v. Industrial Commission, 183 Colo. 52, 515 P.2d 95 (1973); Andersen v. Industrial Commission, 167 Colo. 281, 447 P.2d 221 (1968). A dismissed employee is not entitled to reinstatement or back pay in the event his termination was unlawful, and a worker who receives unemployment compensation is entitled to only a statutorily prescribed unemployment benefit which is less than his salary and which lasts for a limited time. §§ 8-73-102 and -104, 3B C.R.S. (1986).

Unemployment compensation hearings are conducted according to regulations prescribed by the Division, and such regulations need not conform to common law or statutory rules of evidence or other technical rules of procedure. § 8-74-106, 3B C.R.S. (1986). Discovery in an unemployment compensation hearing may be restricted. See Rule 11.2.8, 7 C.C.R. 1101-2, at 35 (1977); Denver Symphony Association v. Industrial Commission, 34 Colo.App. 343, 526 P.2d 685 (1974). The matter in controversy is small and the legal issues are limited, and, consequently, the hearings are often informal. See Rule 11.2.9, 7 C.C.R. 1101-2, at 35 (1977); Asche v. Industrial Commission, 654 P.2d 813 (Colo.1982) (...

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